The business climate in Bangladesh remains unstable following the fall of the Awami League government. Although an interim government led by Nobel Laureate Dr. Muhammad Yunus was formed on August 8, the return to normalcy in trade and commerce is expected to take time, according to several business officials.
The country has been in turmoil since early July, with mass students protests culminating in the ousting of prime minister Sheikh Hasina on August 5. In the wake of these events, many major business leaders have gone into hiding, while others have fled abroad, exacerbating the instability.
The recent devastating floods in several districts have compounded the situation, causing significant damage and further hampering business activities. Conversations with officials from various conglomerates reveal that normal business operations have yet to resume, and it may take considerable time before stability returns.
Business leaders are reporting numerous challenges in the current political environment. Some industries have been forced to shut down operations entirely, while others continue to operate under the shadow of fear. One business leader, speaking on condition of anonymity, noted that the political shifts have led to the closure of several factories, disrupting the supply chain and impacting the market.
Prior to the political unrest, the country was already grappling with issues such as gas shortages, soaring prices of essential goods, and a volatile banking sector. These challenges have only intensified in the current climate, leaving many businesses struggling to survive.
The government has imposed restrictions on cash withdrawals. This has created difficulties for businesses that rely on cash for their operations, although transfers between accounts remain unaffected. The lack of liquidity is a significant concern for many entrepreneurs.
The internal market, which relies heavily on domestic production, is also suffering. Business owners report that while some factories have resumed production, the import of raw materials has not yet returned to normal levels, creating a shortage. The combined effects of decreased sales, dollar shortages, gas and electricity crises, and instability in the banking sector are presenting significant challenges.
Companies that have continued operations face further difficulties. Many of their suppliers and distributors, who were aligned with the previous government, have not yet resumed business, leading to widespread supply chain disruptions.
The recent arson and looting of the Gazi Group’s tyre factory in Rupganj is one example of how political violence is affecting businesses. The factory, owned by Golam Dastagir Gazi, a former Awami League MP, was set ablaze, causing extensive damage.
In the wake of the political changes, several high-profile business leaders are under investigation for their close ties to the former government. Some have fled the country, while others, like Salman F Rahman, former private sector adviser to the prime minister and owner of Beximco Group, have been arrested. His arrest has caused unrest among the employees of his companies, leading to fears about the future of their jobs.
The S Alam Group, known for its control over essential commodities like edible oil and sugar, is also under scrutiny. Allegations of bank fraud and loan manipulation have surfaced, and there is growing concern about the stability of the company’s operations.
Bashir Ahmed, President of the Bangladesh Wholesale Traders Association, expressed concern over the ongoing instability, noting that the absence of key business leaders has left many companies in disarray. Wholesale trade has not even reached 20% of its normal capacity, and the floods have only made things worse, he said.
In response to the crisis, Md Selim Uddin, Secretary of the Ministry of Commerce, assured that the government is taking steps to restore stability in the business sector. “We are addressing any obstacles seriously and will take necessary actions to ensure stability in trade and commerce,” he said. The government is also working to stabilize the market, ensuring that essential goods remain available at reasonable prices and that consumers are not subjected to undue hardship.